Kruk S.A.

The first half of 2011 was an exceptionally successful period for KRUK Group companies in Poland and Romania. In both countries the Group recorded a significant increase in the value of debts accepted for collection. In comparison to the first half of last year, the value went up by as much as 51%, from PLN 3bn to PLN 4.5bn.

What is worth noting, already at the end of June 2011 the value of debts under collection by the KRUK Group (contingency debt and bought debt) exceeded the volume of the entire 2010 when KRUK companies in Poland and Romania accepted PLN 3.8bn worth of receivables.

On the year-on-year basis, KRUK’s purchases grew significantly. In the first six months of 2011, in Poland and Romania, the KRUK Group purchased close to PLN 2.5bn worth of receivables, up by 150% on the year ago. The above was a result of winning by the KRUK Group of several significant tendering procedures for the sale of debts which were held in the first half of the year. In both countries, the majority of debts purchased were from the banking sector.

In comparison with the first half of 2010, the value of debts accepted for collection (contingency debt) remained practically unchanged. The value of debts submitted for collection by creditors in both countries in which KRUK Group operates was close to PLN 2bn.

A trend worth stressing is that as far as contingency debt is concerned, the number of accounts submitted for collection has been falling with their nominal value remaining nearly the same. The above means that individual accounts have much higher balances than a year ago. As regards purchased debt, the number of accounts has been growing both in Poland and in Romania, but the growth is lower than the increase in the nominal value of accounts. The above also confirms the observation that receivables management companies are receiving accounts with increasingly high balances. For example, in the first half of 2010, the average balance of debt collected by the KRUK Group was PLN 2,745, while at the end of June 2011 it jumped to PLN 4,917.

The increase in the number and value of accounts under management was accompanied by a corresponding growth of employment at KRUK. Last year, for the first time in the Group’s history, KRUK companies employed more than 1000 people. Currently, employment at the Group went up by another 15% reaching 1339.

“Looking from the point of view of the recently closed first half-year, the results of the KRUK Group are very good. As recently as a few months ago it was difficult to expect such a spectacular success and the achievement of more than 50% share of the debt purchasing market in Poland and in Romania,” said Piotr Krupa, President of the Board of KRUK SA. “Whether we will be able to keep the above growth rate in the nearest future depends on how active creditors will be and how many accounts they will be willing to submit for collection by external companies but first of all it depends on how much debt will be offered for sale. In accordance with a report prepared by the Gdańsk Institute for Market Economics, in 2014 the value of the receivables management market will reach PLN 22.2bn, with the most dynamic growth taking place this and next year. In the above period, creditors will be putting their unsettled retail portfolios in order. Also in the corporate debt sector, we can expect the reappearance of large-volume portfolios which will contribute to the increase in the value of receivables reaching the debt collection market.”